AT&T Unveils Usage-Based Pricing

As Todd Spangler wrote in Multichannel News [subscription required], “It might be the beginning of the end for the all-you-can-eat broadband buffet”, as AT&T announced usage-based pricing last week for its DSL and U-verse customers. According to Multichannel [this link free], Sanford Bernstein senior analyst Craig Moffett says that this move may provide “air cover” for large U.S. cable operators to do the same. As more users are watching “over-the-top” video services instead of just web-surfing on their broadband connections, cable systems financial models are eing stressed.

Comcast, Cox and Charter cable systems already have usage caps on their broadband services and Canada’s Rogers moved to consumption-based broadband pricing several years ago. Time Warner, however met with customer resistance when it experimented in 2009 with usage-based pricing on some of its systems.

So what does this all mean for the average couch potato? Well if you were expecting to cut your cable service from the SuperOptimal Platimum Tier to Basic Cable and watch all your shows on Hulu Plus, your broadband provider just might have something else in mind.